At a press conference, the prime minister, Meles Zenawi, said: "The statement in my view shows that the [EU] mission has turned out to be something worse than a farce.

"We shall in the coming days and weeks see what we can do to expose the pack of lies and innuendoes that characterise the garbage in this report."

Mr Zenawi, a former guerrilla commander who came to power after overthrowing the Marxist Derg regime, hinted that relations with the EU could take a sharp turn for the worse.

"What the implications of this will be in terms of relations between Ethiopia and the European Union, we will have to wait and see but I don't think you will be surprised if Ethiopia were to insist that it should not be patronised."

The EU is one of Ethiopia's largest donors, spending more than $492m ( £280m) each year funding food aid and development projects.

Ethiopian officials have accused the EU of being biased in favour of the opposition.

The elections, in May, were widely regarded to be the fairest held in Ethiopia, which has a long history of autocratic rule. There was a high turnout and the government permitted rallies by rival parties.

But soon after the polls closed allegations surfaced from around the country that the vote-counting process was being interfered with. Results were not made public at polling stations, and there was a failure to pass on details of the vote to the capital, Addis Ababa.

Police in Addis Ababa opened fire on demonstrators who alleged fraud, killing 36 people. Thousands of opposition supporters were taken into detention, but subsequently released.

The Guardian recently spoke to an opposition supporter in Addis Ababa who claimed he was beaten by police after attending an opposition rally before the elections.

"The police came to our house at midnight, they broke in," said Benyam Tewdoros, an office clerk who asked that his real name not be used. "They beat my father. They took me out into the street and beat me. They stabbed me with a bayonet, in five places on my back.

"Then they forced me to lie on the ground, in mud and pools of water, and forced me to move so I would feel pain. They beat me with sticks until I became unconscious."

In the aftermath of the vote, both sides claimed victory, though the ruling party swiftly conceded that the opposition made major gains, including winning the capital.

One key issue in the elections was land ownership. In Ethiopia, where more than 85% of the population are subsistence farmers, land is publicly owned.

The government argues that this protects small farmers from unscrupulous landlords, while the opposition believes private ownership would help solve Ethiopia's food crisis.

EU observers, who were present in about 1,000 constituencies out of 34,000, found a dramatic swing from the ruling party to the opposition, though because Ethiopia has a "first past the post" system, the votes do not automatically translate into seats.